Ethena partners with Securitize to launch new stablecoin UStb backed by real-world assets (RWA)

According to reports, Ethena ENA is preparing to collaborate with real-world asset tokenization RWA platform Securitize to launch a new stablecoin UStb. This stablecoin will be backed by BlackRock and BlackRock's institutional digital liquidity fund BUIDL, which is based on tokenized assets on the Ethereum blockchain.

BlackRock's BUIDL Fund and Its Role in UStb

The operation of UStb is similar to traditional stablecoins, but the main difference lies in UStb's reserve being invested in BlackRock's BUIDL Fund. BUIDL primarily invests in U.S. dollars, short-term U.S. bonds, and repurchase agreements. Since its launch in March of this year, BUIDL has grown rapidly, with assets under management exceeding $522 million, making it the largest tokenized U.S. government bond fund.

Growth of Tokenized Securities

According to data provided by 21Shares, the parent company of asset management firm 21.co, the tokenized government securities market has grown to over $2 billion. This growth indicates increasing market interest and adoption of tokenized assets.

Securitize's Contribution to the Tokenization Ecosystem

As a partner of UStb, Securitize has established a leading position in the tokenization market, facilitating over $950 million in tokenized investments, including tokenizing various asset classes for financial giants such as BlackRock, Hamilton Lane, and KKR. The collaboration between Securitize and Ethena signifies a larger trend of integrating traditional finance with blockchain technology.

Difference Between UStb and USDe

Independent Products and Unique Risk Profiles

UStb will be offered as a "completely independent product," providing different risk characteristics from Ethena's current stablecoin, USDe. According to the Ethena team, UStb will serve as an alternative option with a different risk profile, offering users more stability and diversification.

What is USDe?

USDe was launched in February of this year and is described as a synthetic dollar, quickly becoming the fifth-largest stablecoin by market capitalization, with a circulating market cap of $2.6 billion. Unlike traditional stablecoins backed by fiat currency or assets, USDe utilizes derivative hedging strategies, using cryptocurrencies like Ethereum, Bitcoin, and Solana as collateral, and maintains its peg to the dollar through arbitrage minting and redemption mechanisms. This unique structure allows USDe to generate profits through spot and futures spread trading strategies.

Risks Facing USDe

Despite USDe's impressive performance, there are still some risks, including exposure to the derivatives market, potential counterparty risks from exchanges, and the volatility of its cryptocurrency collateral. These factors may pose challenges to maintaining its peg to the dollar in unfavorable market conditions. During a crypto market sell-off in August of this year, USDe redeemed nearly $100 million, temporarily dropping to $0.997 but later rebounding to $1. Additionally, Ethena Labs temporarily disabled its front end due to an attack on its domain registrar account.

How UStb Supports USDe

UStb is expected to play a supportive role for USDe in challenging market conditions. Ethena's governance team may reallocate the support assets of USDe to UStb during periods of negative funding rates to reduce risks and stabilize USDe's peg if necessary.

Furthermore, Ethena plans to use UStb as collateral on centralized exchanges including Bybit and Bitget. This strategy aims to increase the utility of UStb while providing additional support for USDe.

In February of this year, Ethena Labs announced the successful completion of a strategic financing round, raising $14 million and valuing the company at $300 million. This funding round was jointly led by venture capital firm Dragonfly and the family office Maelstrom of BitMEX founder Arthur Hayes.